Current State of Finnish Plywood Exports

From January to July of this year, Finland's plywood exports experienced a modest decline of one percent compared to the previous year. This trend reflects both a decrease in domestic consumption and challenges arising from sourcing raw materials. More specifically, softwood plywood exports saw a slight increase of two percent, while the export of hardwood plywood reduced by two percent.

These fluctuations underline the complex interplay of market forces that impact the timber industry, especially as they relate to birch plywood. The diminished availability of birch logs, primarily due to the cessation of Russian birch log imports, has significantly influenced the overall production rates and export capabilities of Finnish plywood manufacturers.

Production Outlook for 2023 and Beyond

According to insights gathered from PTT Finland's Pellervo Economic Institute, exports are expected to rebound slightly, projected to rise by one percent overall by the end of the year. However, this does not signal an all-around growth in production; rather, production is predicted to decrease by another one percent relative to the previous period due to contracting domestic demand.

Looking forward, predictions indicate a cautious recovery fueled by a slight improvement in construction activity, which is expected to lead plywood exports to rise by two percent in 2024. In tandem, production might see a similar two percent growth under these favorable conditions. However, significant concerns loom on the horizon for 2025, as Metsä Group has announced plans to cease operations at its Suolahti factory during the first quarter, which will subsequently reduce production capacity.

Impact of Production Facility Changes

The closure of the Suolahti facility will likely pivot towards the optimization of the new Äänekoski plywood production facility, where softwood plywood production could be revitalized. This type of transition represents both challenge and opportunity for the wholesale timber buyers and suppliers who rely on consistent plywood availability to meet market demands.

Export Pricing Trends in 2023

Despite the fluctuations in export volumes, the plywood market continues to experience price adjustments. The average export price of plywood has seen a significant decline, with prices dropping nine percent in January-July compared to the previous year. While sheet plywood prices fell by four percent, the drop in softwood plywood prices is more pronounced at eleven percent. Overall, a decrease of eight percent in average plywood export prices is anticipated for 2023, with an additional modest decline of one percent expected for 2025.

Interestingly, even though the prices are trending downward, they are still set to remain considerably higher than levels observed before the termination of plywood imports from Russia to Finland and Europe. This context may have lasting consequences in shaping the European timber market landscape, particularly for those negotiating supply contracts and pricing arrangements.

Conclusion

As the Finnish plywood market continues to adapt to external pressures and production challenges, stakeholders—including wholesale timber buyers and suppliers in Europe and the US—should remain attentive to these developments. Understanding the nuances of export trends, production forecasts, and pricing fluctuations will be crucial for effectively navigating the evolving wood and timber industry.